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HomeMy WebLinkAboutMinutes 09-17-2010 CITIZENS’ BUDGET COMMITTEE Meeting Date: September 17, 2010 Conference Room 3 Meeting convened at 7:31 a.m. MEMBERS PRESENT: Carl Hensley, Chair Craig Mundt Richard Pancoast Dan Kurek Edward Lounds Ryan Strickland (7:36) Patricia “Pat” Ferrick Bill Hammer Ron Knaggs John Culverhouse (7:33) Patti Tobin Jay L. McBee (7:34) Randy Ezell (7:37) MEMBERS ABSENT: Edith Hepburn Dana McSweeney OTHERS PRESENT: Faye Outlaw Toby Long Don West Jennifer Hill Marie Gouin Roger Shinn Debbie Brisson Sophia Holt Mike Monahan Kara Wood Laurie Waldie Robert O’Sullivan Bill Hoeffner Jim David Karen Smith Eva O’Donnell Beth Ryder Audrey Jackson CALL TO ORDER Mr. Hensley called the meeting to order at 7:31 a.m. TH APPROVAL OF MINUTES – AUGUST 20 MEETING Mr. Pancoast made a motion to approve the minutes. The motion was seconded by Mr. Mundt and unanimously approved. UPDATE: SMALL BUSINESS CONCERNS; CODE REGULATIONS & PERMITTING PROCESS – Faye Outlaw Citizens’ Budget Committee September 17, 2010 Page 2 Ms. Outlaw reported that the meeting she had scheduled the day before with Mr. Pelton and the Chamber of Commerce regarding struggles small businesses are having with expansion and code regulations was postponed because of the workshop on the millage. She will reschedule that meeting. Ms. Outlaw, Mr. Pelton and Linda Cox will discuss the concerns expressed by the Committee and plan a format for reaching out to the business community. There will probably be a series of meetings. Ms. Outlaw plans to bring back to the Committee solutions to the problems they identify. UPDATE ON REALIGNMENT – Faye Outlaw The written report is on her desk. When it is sent to the Board, she will send it to the Committee. The realignment in Housing and Community Services has been completed. There were no layoffs in Veterans, Community Services or Housing. There may be some in the Library. They are still working on the schedule. Members of the community wanted to raise money to keep the Hurston branch open more hours. A roving team is expected to spend two days at Hurston and Port St. Lucie and backfill overflow at the other branches. The realignment of Public Safety and Communications has been completed. There were no layoffs there. On the Parks and Recreation side of Parks and Recreation Services, the realignment has been completed and there have been layoffs. The Central Services side is in process. After the budget process, Ms. Outlaw will focus on Management and Budget (OMB) and Human Resources. That will complete the realignment. Mr. Lounds asked if that was the last of the consolidation. Ms. Outlaw answered that it is the last of the plan that the Board approved. If the Board asked for more, she’d be hard pressed to come up with a smaller number. Right now there are no further plans. Mr. Knaggs asked if she could summarize the major points of the plan. Ms. Outlaw reported that with the consolidation of 18 departments to nine, some were rolled into other departments. The director position was removed by eliminating or downgrading positions. That had a ripple effect. Some assistants and managers were affected. Furloughs and health plan benefits had been proposed to the Board, but they did not support it. They are divided on the type of furlough plan they want. They are negotiating with the union. Rather than give direction on a furlough plan, the union has continued to press for a guaranteed 40-hour work week. The union presented a health plan. It has been rejected. The County is looking at changing the employees’ contributions. The last direction was for Ms. Outlaw to come back with options. Citizens’ Budget Committee September 17, 2010 Page 3 Mr. Knaggs asked about attrition in the restructuring. Ms. Outlaw answered that most of the attrition occurred before the realignment. The turnover rate was about 10% prior to the last fiscal year. It dropped from 10% to 2%. There have been some terminations. Most of those have not been replaced. Layoffs have nothing to do with performance or violations. Mr. Knaggs asked about salary reductions. Ms. Outlaw answered there were none across the board. The reductions were related to changes in pay grade or position. A former director now acting as a manager is in a different pay grade. She explained the County rules for the exception of a person promoted to a different position. Mr. Knaggs asked how much the realignment saved the County. Ms. Outlaw answered that the projection was going to be between $2-3 million. Furloughs and any changes in health plans are not included. Mr. Lounds asked the current number of employees. Ms. Outlaw said at the end of the scheduled layoffs, there should be around 644. 988 was the number at the peak. Mr. Lounds said the information at the last meeting about the clinic was based on 1,000 employees. What does a reduction of 1/3 of that do to the scenario? Ms. Outlaw said they will have to recalculate the savings. She hopes to bring on the City of Fort Pierce or other agencies when they get it up and running. Mr. Lounds feels more participants would make the bottom line look better. Discussions will resume when the clinic is open. Mr. Lounds asked about the employees making a larger contribution to their health plans. Ms. Outlaw explained that the County pays 95%. The Board is discussing raising the employees’ percent. She is bringing different options to the Board. Mr. Lounds asked if he could sign up. Raising their contribution would be another step in reducing take-home pay after furlough days. 5% or 10% is a beautiful plan compared to industry outside of government agencies. Mr. Knaggs asked how much health care has gone up. It has been coming down the last two years. Mr. Lounds asked if there had been any effect on the bond rating. Ms. Outlaw said the rating has not changed. We have not been down-graded but we have not asked for a rating. The current rating is A-2. UPDATE ON TENTATIVE BUDGET HEARING – Marie Gouin th Ms. Gouin reported that the Tentative Budget Hearing was September 9. The Board adopted the same millage rates that were sent in the Truth in Millage (TRIM) notices with the understanding that they planned to reduce the number later. There was a workshop the day before. The packet from the meeting was distributed to the members (see Citizens’ Budget Committee September 17, 2010 Page 4 attached). She noted the scenarios and explained the Stabilization Fund and the effect of increases in the Fine and Forfeiture Fund. Ms. Outlaw added an explanation of the millage being shifted between the General Fund and Fine and Forfeiture Fund. Many assumed that all of the $9.7 million that would be generated if the higher millage rates were adopted would go on account to help the future deficit. That is not the case. Only the General Fund portion could be set aside. Ms. Outlaw said a number of the members were at the workshop the day before. She would be interested to hear their perspectives. It is clear the Board is struggling with the millage proposal. Ms. Ferrick said it was an eye-opener. The Committee recommended the Board go to the rollback number. The highest option listed is the rate that was adopted for the TRIM notices. She thinks the Committee should recommend it. She was dismayed at the meeting. Ms. Ferrick reported that she spoke to a couple Commissioners and the only way they would accept the millage rate that was on the table for the meeting was if the small business folks would come in and talk. She talked to several and they told her the small businesses are not complaining about property value increases. Property value increases to a business person equates to additional equity which means a higher profit and loss statement and the ability to get an equity loan line-of-credit at a lower rate. That is why they are not complaining. Even though their property values and taxes are higher, their bottom line is higher. They are not going to put that in writing or come in and say it. Ms. Ferrick made the observation that the Board has had two years to formulate a Municipal Service Taxing Unit (MSTU) and get the Cities on board. That has not taken place. Ms. Ferrick reported that there was discussion about the Jail. As far as she knows, the jail facility belongs to the County. It does not belong to the Sheriff. She left the meeting at 3:30 p.m. She recommended that the Committee recommend the Board adopt the highest millage rate because that is the only way to salvage any employees down the road. You need to have the fall-back money. She was taught that in her family finances. She read the story The Moral of the Donkey (see attached). She says it is not happening. Mr. Knaggs asked the Committee to look at pages 3 and 1A. The difference in the highest and lowest rates would cost the average homeowner about $10 and the Board spent hours on the details. In his opinion, the discussion got down to three things: 1. Why isn’t the Sheriff giving us more? 2. What about the MSTU for Transit? 3. Why are we are we doing this so late? It went round and round and round. He doesn’t think they accomplished anything. It was devastating when the County Attorney said they could not adopt a rate that day. They rehashed the same stuff for another two hours. The points raised that kept them from agreeing with the MSTU for Transit is the bus Citizens’ Budget Committee September 17, 2010 Page 5 transportation. The objection is whether the Council on Aging is reducing their budget in the same way as the County. Some think they should, and others think it is not the County’s business and they are doing a good job. Mr. Knaggs thinks it is a contract with a third party. The County is contracting for services. We could go and rebid or cut down the services requested to reduce the cost. To drill down people’s salaries seemed inappropriate in his opinion. Mr. Knaggs reported that there was a lot of talk about the Sheriff. The County asked the Sheriff to administer the Jail. It is similar to a contract. Mr. Long added that they passed an ordinance making the Sheriff the Chief Corrections Officer. Mr. Knaggs continued that now the Board is complaining that the services are too high. The Sheriff’s office has given money back here and there. They have reduced their budget four or five percent. Examples were given of things that were too late to deal with. It was a very frustrating afternoon. In his past business life, he would have handled it differently. Mr. Knaggs is not in favor of recommending the highest tax. He was in favor of the Committee doing some side work for the Commissioners on energy savings in the County buildings and reporting back. One Commissioner said the Committee did not have the expertise. Mr. Knaggs asked two of the Commissioners what the Committee is supposed to do. Neither of them had an answer for him. Mr. Knaggs commented on the page prepared by the Property Appraiser’s office. 78% of the taxing units in the residential column had a decrease in their taxes. One Commissioner focused on commercial. The proportions were very different from residential. Mr. Mundt thought two and one-half Commissioners were in agreement at the beginning of the meeting. The more they got into it, the further apart they became. There were five different mindsets. Mr. Mundt explained those. He didn’t think it made a lot of sense to go through what they went through for a $10 difference. He doesn’t know how Ms. Outlaw will be able to put together the proposals they want, because there are five different minds that want five different outcomes. He thought Ms. Outlaw and OMB were very creative in what they presented. He does not think the Commissioners will go to rollback. There was some discussion on options. Mr. Ezell left the meeting at 8:18 am. Mr. Lounds asked what the deficit is going into 2013. Ms. Outlaw answered about $42,000,000. Mr. Lounds asked what the savings would be if all employees were released. Ms. Outlaw said her operating budget is about $45,000,000. Mr. Lounds said we can’t get there by doing employee cuts. Mr. Mundt said some Commissioners are in denial about 2013 being a train wreck. Mr. Lounds said they better listen to the whistle, it’s coming. Mr. Mundt said they want to put it off and you can’t raise the millage high enough in a single year to make up the difference. There was discussion on starting to make it up. Options on the table were discussed. Mr. Lounds asked about the increase as a taxpayer Citizens’ Budget Committee September 17, 2010 Page 6 from the School Board and the Fire District. Ms. Gouin answered that the information was in the TRIM notice. The increase is based on each property’s situation. Mr. Kurek asked what would happen if they could not make a decision. Ms. Outlaw said the Attorney was not there, but she thought he had answered that it would go to rollback. Mr. Long said the TRIM notice says if no changes are made, you go to rollback. Mr. Knaggs believes that a lack of decision forces State law to go into effect. Mr. Hammer said there is another option, raising additional revenue. The County owns a lot of property. What is the return on investment? He thinks those things should be on the table since we are facing a dilemma. Ms. Outlaw agreed. A number of items have been studied. She gave an example of parking fees on the beach. The projected amount of revenue would not cover the operating cost. The issue with the Stadium is that there is a long-term contract without a provision for changing the revenue agreements. They are trying to work with promoters to bring events to the Fairgrounds. It is a challenge. Ms. Outlaw reminded the Committee that when they started the process last year, the projected deficit was $57,000,000. $15,000,000 was cut, not easily. It leaves a $42,000,000 deficit. If how difficult it has been to cut the $15,000,000 is any indication of how it will be to cut more, it will be more difficult. She continues to impress on the Board that we have to start now. Her original plan may have been too aggressive. Part of the $22,000,000 planned cuts did not fare very well politically. We are past the point of having options that are politically palatable. She is going to have to come to the Committee for help in putting together a plan. She will advise the Committee of where we are after the budget is adopted, so they can look at options to present next year. Mr. Hensley said not making a decision does not help. Ms. Outlaw believes a decision will be made by design or default. Ms. Ferrick said this year’s is the best budget book that has been put out. She complimented Ms. Outlaw and Ms. Gouin and feels the Committee should support Ms. Outlaw in what she is trying to do. Mr. Pancoast asked if the Committee could help Ms. Outlaw. Mr. Mundt thinks the only option is to recognize and encourage the Board to recognize that 2013 has a major deficit and budget properly with the use of carry forward. They have to work it out. The issues were discussed. Mr. Hammer said if the changes were made over three years, they would be less painful than done in disaster mode. Mr. McBee left the meeting at 8:28 am. There are different opinions on the future and solutions. Mr. Knaggs reported that one Commissioner feels very strongly that the next two years will be better. Mr. Pancoast agrees that it will be better. Mr. Mundt said the Property Appraiser’s office does not predict Citizens’ Budget Committee September 17, 2010 Page 7 next year to be better. Positions of the Commissioners were discussed. Mr. Lounds pointed out the increases on the Agriculture section of the Property Appraiser’s report. They are struggling. Mr. Hammer said there is a bigger hole in the overall economy of the County. There are so many regulations up in the air. Many people are leaving. Potential scenarios were discussed. Ms. Ferrick said the Commissioners are discussing cents per day for most homeowners. She thinks there should be a motion. Mr. Hensley said there was a motion that the Committee recommends that the Board adopt Scenario One. Mr. Lounds seconded the motion. Mr. Knaggs understood at the Tentative Budget Hearing that Scenario One was approved with the understanding that it would be reduced for the Final Budget Hearing. It is the benchmark. Mr. Pancoast asked how it would affect 2013 if Scenario One was adopted. Ms. Outlaw answered that it would give $1,500,000 for 2011 and a little less in 2012 to save for 2013. Mr. Knaggs said that is not the only stone. There is a whole series of stones that will hopefully grow into a wall. We can’t do it all with one issue. The motion was approved unanimously. OTHER ISSUES There were no other issues. ADJOURNMENT Mr. Hensley thanked the members and adjourned the meeting at 8:35 a.m. Respectfully submitted by: Brenda Marlin The next CBC regular meeting will be held on Friday, October 15, 2010, at 7:30 a.m., in Conference Room #3, at the St. Lucie County Roger Poitras Administration Annex.